Business, Finance & Economics

Down and out in Ho Chi Minh City


HO CHI MINH CITY — Two years ago Le Thi Cuc, 35, left her farming village in central Quang Binh Province and came to the big city to take a job at a garment factory. 10 hours a day, 6 days a week, she sewed T-shirts for Western brands like Old Navy and The Gap, taking home about $60 a month.

It wasn’t much, just enough to pay her expenses and send $10 home to her aged parents and five siblings, but it was better than the desperate poverty of Quang Binh, and she had every reason to think things would improve.

Vietnam had just joined the World Trade Organization, the economy had grown 7 percent per year since 2000, foreign investment was pouring in, and everyone was saying that within a decade or two the country might be as rich as Thailand.

Sitting on a reed mat on the floor of the 100-square-foot rented room she shares with four other garment workers, Cuc said whatever optimism she had two years ago was gone. Cuc has been unemployed since December. The garment company she worked for, Collan Inc., has shed 1,000 of the 3,000 workers it had last year. With consumer demand in the U.S., Europe and Japan plummeting since last fall, Vietnam’s exports, the engine of its economy, have fallen off a cliff.

Still, Cuc is hanging on in the city, sending out job applications. So far, she hasn’t had any replies.

“I’m very tired of my fate,” Cuc said.

There are tens of thousands of Cucs in Ho Chi Minh City today. In December the local chapter of the government-run labor union said the city had lost 30,000 jobs in November alone. As for the rest of Vietnam, Nguyen Thi Hai Van, deputy head of the government’s Labor and Employment Agency, estimated in early March that total job losses for the first half of the year could come to 300,000.

Such figures only apply to the minority of Vietnamese jobs in the formal sector — foreign-owned firms, for instance, which must report salaries to tax authorities. In the small, informal family-owned businesses that make up most of Vietnam’s economy, there is no way to tell how many jobs are vanishing.

Meanwhile, Vietnam’s population is in the midst of a youth bulge: according to the UNDP, the labor force is growing by one million workers per year. The same UNDP report estimated that in order to find employment for them, and for the 200,000 each year who, like Cuc, leave agriculture to look for industrial work, the economy would have to grow at over 8.5 percent. Instead, growth estimates for this year range from the Asian Development Bank’s 5.5 percent to the Economist Intelligence Unit’s 0.3 percent.

Traditionally, Vietnamese workers who are laid off can fall back on their home villages for support. They return to their families, who divide the annual rice crop up into a few extra bowls. But this time around, that may be harder. Vietnamese agriculture has been gradually consolidating for greater efficiency, and many poor families have no land of their own.

“I can’t go back to the countryside, there’s no work there either,” said Cuc’s former coworker at Collan, Dinh Thi Ha, 21. Ha, who comes from the same poor area in Quang Binh as Cuc, was laid off on January 20, and returned to her village for the Vietnamese New Year, or Tet. Unable to find a job, she came back to Ho Chi Minh City, and has been trying to find a job since.

“Two years ago I used to expect I could save some money,” said Ha. “But that’s vanished into the sky now.”

Workers who can’t go home are pushed into part-time, informal jobs to make ends meet. Le Xuan Thong, 38, was making a steady $200 a month as a salesman at a Sanyo television store until he was laid off in November. Now he drives an "xe om," or motorbike taxi, on the streets of Ho Chi Minh City.

“On a good day, I might make 100,000 dong ($6). On a bad day...” Thong shrugs. “I have to work. I have a six-month-old daughter.”

For others, the fall into the informal economy is harder still. Thuyen, 23, grew up in a mountain village on the Chinese border, and moved to Hanoi in 2005 to work at a Japanese electric cable factory. She was laid off in December, but has yet to tell her parents where she is working now: a massage parlor.

“When I graduated from school, I just wanted to be a factory worker,” Thuyen said. “Now I’m worried someone I know will see me working in the massage parlor. But I don’t have any choice.”

For more GlobalPost Dispatches on displaced workers:

The end of the "Chinese Dream"?

Destitute, jobless, and on the move again

Financial crisis halts Central Asia’s economic boom



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